Practical methods of setting standards for the Basic Skills Assessment tests in secondary level reading, writer's skills, and mathematics are offered in this manual. An overview discusses the need for standards and includes a brief description of current practices in establishing them. In light of related social and political issues, it is advised that standards be viewed as commitments, minimums, and results of a process; that they be realistic estimates; and that they not be overgeneralized or hurriedly established. Two types of judgments used in setting performance standards are judgments about the questions in the test, and judgments about the mastery status of a sample of students taking the tests. Nedelsky's Method and Angoff's Method are based on judgments about the questions on the test and involve the selection of judges, definition of minimally acceptable performance and the combination of judgments into one standard. The Borderline-Group Method and the Contrasting-Groups Method are based on judgments of the mastery status of a sample of students. The judgments used in these methods should be: (1) based on the knowledge or skill the test is intended to measure; (2) made by qualified persons; and (3) reasonably current for each student's achievement. Procedures for each method are outlined and two types of classification errors are described. (JAC)